HSBC may be selling its U.S. credit card division, but that hasn't stopped the bank from renewing some of its contracted credit card accounts. The company announced in a press release that it had reached an agreement with Saks Inc., owner of specialty retailer Saks Fifth Avenue, Big Lots, Darvin Furniture and Jordan's Furniture to continue its management of the retailers' private label credit cards.
In August, HSBC announced it was selling its U.S. credit card assets to Capital One Financial Corp. in a deal that would give them $32.7 billion for the portfolio. The sale included HSBC's private store-branded credit cards and Household Bank credit cards are part of the deal also. The sale has not been finalized yet; in November a consumer group asked the Office of the Comptroller of the Currency to reopen the comment period regarding the merger. That extended comment period ended Dec. 19, but the federal regulatory agency hasn't announced a decision or at timeline for when it might make its decision.
Saks and the other three retailers all consented to allow Capital One to assume management of their respective agreements if and when the merger acquisition is final. All four of the retailers have had long-term agreements with HSBC. Illinois-based Darvin Furniture has had a relationship with the bank for more than 30 years. Jordan's Furniture, with six stores in Massachusetts and New Hampshire, began its credit card agreement with HSBC in 1991. Saks began its HBSC relationship in 2003, and closeout retailer Big Lots has had its credit card with HSBC since 2005.
Capital One also announced a $9 billion deal in June to take over ING's online banking unit. That deal plus the bid for HSBC's credit cards has caused concern that the bank could become too big, and that its focus on credit cards could put it at risk as a "monoline" business.